THE US dollar's rapid rise during the last six weeks is thought to be inverting this year's trend in foreign beef trade by increasing imports while cutting exports.
However, there is one notable exception.
The Japanese yen also has risen and is at 13-year highs, triggering thoughts that meat exports to this country could continue rising.
Livestock Marketing Information Centre agricultural economist Jim Robb said Japan could be one of the few countries that will increase its imports of US beef.
He said Japan may even buy more pork than beef, but the increase in meat buying from Japan likely won't make up for declines from other countries.
In the year to August, Japan has imported 51,279 metric tons of US beef and beef products, up 64 per cent from 31,322 tons purchased in the same year-ago period.
Market analysts linked the yen's rise to a desire among traders to avoid risk by funding certain investments with money from a country with a low interest rate, analysts said.
Sterling Marketing Inc president John Nalivka said the dollar continued to gain even as economies around the world sink toward recession.
"If all economies are in trouble, the US dollar is (seen as) the best of the worst," Mr Nalivka said.
International traders want to hold and trade in dollars since it is perceived as being more stable than many other currencies.
With the advent of Mandatory Price Reporting legislation in 2001, beef traders now have weekly trade data, Mr Robb said.
The figures can hold errors that the monthly reports, which come out two months late, iron out, though the weekly numbers do help spot trends more quickly.
During most of the year, a weakening US dollar fueled export shipments of beef and the yearly totals are expected to be the second highest on record, behind only 2003, the year bovine spongiform encephalopathy, or mad-cow disease, was discovered in an imported Washington state cow.
When it showed up, the world shut off its imports of US beef and recovery of these markets has been slow.
National Cattlemen's Beef Association Chief Economist Gregg Doud said Wednesday that 2008 sales were expected to reach $3.5 billion, the highest since 2003.
Since the end of August, however, a strengthening dollar has resulted in a decline in beef exports to key trading partners, Mr Robb said in a newsletter.
"In fact, for the week ending Oct. 18, the weekly beef export total was at 7,700 metric tons, the smallest weekly figure reported since late March and near shipment levels posted prior to the resumption of beef exports to South Korea," Mr Robb said.
Data from the week ending Oct. 25 were up again at 8,500 tons.
Of particular concern to Mr Robb and others is Mexico's drop in beef purchases.
Shipments in the latest report were about 1,500 tons, down from almost 6,000 in July, and Mr Robb blamed the tumbling Mexican peso, while at the same time the US dollar spiked.
Shipments to Canada were off by 50 per cent from the July peak, also because of the interplay of the US and Canadian dollars.
Unlike beef exports, there aren't good weekly figures on imports, analysts said.
Through August, imports were down 22.6 per cent for the year, with the biggest drop coming out of Uruguay's market, Doud said.
This accounted for about 60 per cent of the US decline in beef imports, he said.
While a stronger US dollar contributed to the decline in imports from Uruguay this year, it wasn't the whole picture, Doud said.
Europe's restrictions on Brazilian beef imports opened up a market for Uruguay into Europe and even Russia, he said.
Allendale Inc market analyst Rich Nelson said he expected to see the US beef import totals decline through the end of the year, changing that 22.6 per cent decrease through August into only a 5 per cent or 10 per cent decrease for the year.
Countries like New Zealand and the South American countries could be in line to boost exports to the US after seeing significant shortfalls earlier this year because of the weaker US dollar.
The US is still is reducing its cow herd, Mr Nelson and Mr Doud said.
Increased slaughter rates this year mean less demand for foreign lean beef, but it also means US producers have less beef production potential.
US demand for beef imports next year and less production at home could boost imports again in 2009.
But that could pose a problem, Mr Robb said.
Livestock numbers around the world are not increasing.
Australia and Europe are shrinking their herds, and South America may be declining as well, he said.
Dow Jones Newswires
